Dubai has emerged as a global business destination, attracting entrepreneurs and investors from all over the world. One of the key reasons behind this surge in popularity is the ease of setting up a Free Zone company, which offers numerous incentives such as 100% foreign ownership, tax exemptions, and simplified procedures.
In this in-depth guide, we’ll explain how to start a Free Zone company in Dubai, from choosing the right Free Zone and license type to understanding costs, documentation, and the registration process. If you’re considering launching a business in the UAE, this guide will help you get started with confidence.
1. What is a Free Zone in Dubai?
A Free Zone in Dubai is a specially designated area that allows expatriates and foreign investors to own and operate a business with full control. These zones were introduced to encourage international investment by reducing restrictions and offering flexible company structures.
Each Free Zone is governed by its own authority and has specific rules regarding permitted business activities, licensing, office space, and visa eligibility. There are over 30 Free Zones in Dubai, including popular ones such as:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Internet City (DIC)
- Dubai Media City (DMC)
- Dubai Silicon Oasis (DSO)
- Dubai International Financial Centre (DIFC)
- Dubai South
2. Why Set Up a Business in a Free Zone?
Starting a company in a Dubai Free Zone offers several advantages, particularly for foreign entrepreneurs, freelancers, and digital businesses. The main benefits include:
100% Foreign Ownership
Unlike the mainland, Free Zones allow complete foreign ownership without the need for a local sponsor or Emirati partner.
Tax Benefits
Companies in Free Zones enjoy a 0% personal income tax and 0% corporate tax (subject to UAE’s new 9% corporate tax on profits exceeding AED 375,000 annually).
Repatriation of Capital and Profits
You can send your profits and capital back to your home country without restrictions.
No Customs Duties
Free Zone businesses are exempt from import and export duties within the zone.
Streamlined Setup Process
The licensing and registration process is fast, with most Free Zones offering online applications and approvals within a few days.
Modern Infrastructure
Many Free Zones offer state-of-the-art office spaces, coworking facilities, warehousing, and logistics support.
3. Free Zone vs Mainland: A Quick Comparison
| Feature | Free Zone | Mainland |
|---|---|---|
| Ownership | 100% foreign ownership allowed | Often requires a local agent or service provider |
| Business Reach | Limited to Free Zone or international markets | Can operate across the UAE market |
| Corporate Tax | 0–9% (above AED 375,000) | 0–9% (above AED 375,000) |
| Office Requirement | Flexi-desk or shared office accepted | Physical office space is mandatory |
| Cost of Setup | Lower overall setup and renewal costs | Higher, depending on license and location |
| Regulatory Body | Free Zone Authority | Department of Economic Development (DED) |
Free Zones are ideal for startups, international companies, freelancers, and e-commerce brands that do not need to serve the on-ground UAE market directly.
4. Types of Free Zone Licenses
Selecting the right license type is critical and depends on your intended business activities. Most Free Zones offer a wide range of options:
1. Commercial License
For businesses involved in trading activities, such as import/export, distribution, retail, or wholesale.
2. Professional/Service License
For individuals or companies offering services like consulting, marketing, IT, HR, education, and design.
3. Industrial License
For manufacturing, production, or packaging companies operating within industrial Free Zones.
4. E-commerce License
Ideal for online sellers, drop shippers, or digital businesses operating in the UAE and international markets.
5. Educational License
For training centers, academies, and ed-tech companies.
Some Free Zones also allow dual or mixed-activity licenses, which enable companies to combine trading and service activities under a single entity.
5. Step-by-Step Process to Start a Free Zone Company
Here’s how to launch your Free Zone business in Dubai, step by step:
Step 1: Identify Your Business Activity
Start by defining your business model and selecting the exact activity or activities you plan to conduct. Free Zones have specific lists of permissible activities.
Step 2: Choose the Right Free Zone
Each Free Zone has a different focus and caters to specific industries. For example:
- DMCC: Commodities, crypto, gold trading, fintech
- DIC: Tech and software companies
- DMC: Media, production, and content creation
- Dubai South: Logistics and aviation
Your choice should align with your activity, required infrastructure, and visa requirements.
Step 3: Choose a Company Name
Select a unique business name following the Free Zone authority’s naming guidelines. Avoid names that are offensive, religious, or refer to government entities.
Step 4: Apply for Initial Approval
Submit an initial application to the Free Zone authority. This typically includes:
- Business plan or activity description
- Passport copies of shareholders
- Preferred company name
Step 5: Submit Documentation
Once you receive initial approval, submit your complete documentation. (See the next section for common documents.)
Step 6: Lease Office Space
Most Free Zones require you to lease a physical office, flexi-desk, or virtual office. Options vary based on the number of visa allocations you need.
Step 7: Pay License and Registration Fees
The cost depends on the type of license, office size, and number of visas. Most Free Zones offer packages for startups and small businesses.
Step 8: Receive Your License and Registration
After payment and review, you’ll receive:
- Certificate of Incorporation
- Business License
- Shareholder Certificate
- Office Lease Agreement
- Establishment Card (used for visa applications)
Step 9: Apply for Visas
You can now apply for UAE residence visas for yourself, your employees, and dependents. The process includes:
- Medical test
- Emirates ID application
- Visa stamping on passport
6. Documents Required for Setup
While requirements can vary slightly by Free Zone, the most commonly required documents include:
- Passport copy of shareholder(s)
- Passport-sized photos
- Application form
- Business plan or activity description
- Proof of address (in some cases)
- No objection letter (if shareholder is on another UAE visa)
- Board resolution and Memorandum of Association (for corporate shareholders)
If you are working with a business setup consultant, they will typically handle the paperwork on your behalf.
7. Costs of Setting Up a Free Zone Company
The total cost of setting up a Free Zone company in Dubai depends on:
- Type of license
- Number of shareholders
- Number of visas required
- Size and location of the office space
- Choice of Free Zone
As of 2025, typical startup packages range from:
- AED 12,000 to AED 25,000 for zero visa packages
- AED 20,000 to AED 35,000 for single visa packages
- AED 40,000 and above for multi-visa packages or physical office setups
Some Free Zones offer “lifetime visa” offers or limited-time promotions that can reduce your setup cost substantially.
Keep in mind that renewal fees apply annually.
8. Best Free Zones in Dubai for Startups and SMEs
Here are some of the top Free Zones for small business owners, freelancers, and startups:
1. Dubai Multi Commodities Centre (DMCC)
One of the most popular and versatile Free Zones in the UAE, suitable for trading, crypto, finance, and consultancy firms.
2. Dubai Silicon Oasis (DSO)
Tech-focused Free Zone offering affordable packages, especially for software developers and hardware manufacturers.
3. International Free Zone Authority (IFZA)
Known for low-cost packages and fast registration process. Suitable for freelancers and service businesses.
4. Dubai Airport Free Zone (DAFZA)
Premium Free Zone located near the airport, ideal for import-export and logistics businesses.
5. Dubai South
Perfect for e-commerce, logistics, and aviation companies, with access to Al Maktoum Airport and Jebel Ali Port.
Each Free Zone has its own strengths, so evaluate based on your business goals, location preferences, and budget.
9. Frequently Asked Questions
Can I sell my products or services in the Dubai mainland?
Not directly. Free Zone companies cannot do business in the local UAE market unless they appoint a local distributor or set up a mainland branch.
How long does it take to register a Free Zone company?
With all documents in place, it can take between 3 to 10 business days.
Do I need a UAE visa to open a Free Zone company?
No, you can own a company remotely. However, if you want to reside in Dubai or hire employees, you will need a visa.
Can one person own 100% of a Free Zone company?
Yes, Free Zones allow full ownership by a single individual.
Are there any hidden fees?
Some Free Zones have lower upfront costs but charge high renewal or visa fees. It’s important to review the full fee structure before signing up.
Final Thoughts: Work with GenZone for Seamless Setup
Starting a business in a Free Zone sounds easy—and it is—with the right partner by your side. While you can apply directly to a Free Zone, many first-time entrepreneurs get stuck in bureaucracy, pay more than necessary, or select the wrong Free Zone for their activity.
That’s where GenZone comes in.
GenZone is one of Dubai’s most transparent and reliable business setup service providers. With over 10,000 hours of hands-on experience, they help entrepreneurs:
- Choose the most cost-effective Free Zone for their needs
- Avoid hidden fees and complex paperwork
- Get their business license and visa processed quickly
- Access fully managed services—from company formation to accounting
They’ve helped hundreds of business owners relocate and set up successful companies in Dubai with clarity and confidence.
If you’re serious about starting a Free Zone company in Dubai, don’t go in blind. Let GenZone guide you with a done-for-you process that saves time, money, and frustration.
Visit www.genzone.co or book a free consultation today.